Sunday, June 17, 2012

The Low Down on Singapore Taxes

What is to be done on a hot Sunday afternoon where life is like living out a sci-fi movie - everything is being baked under the hot sun and threatening to explode into a culmination of light and heat waves.

Read the Singapore Personal Income Tax Guide! That's what.....It doesn't get more epic than this. :D

I'm pleased to report that the personal income tax rates in Singapore is noted to be one of the lowest in the world. (My Australian co-worker kindly alerts me that even if Singapore has one of the lowest personal income tax rates in the world, we should not forget that we also have a combination of other taxes and expenses to contend with. I painfully regard the price of COE and accept his comment).

Back to basics....and to summarize what could be a rather complicated process, one is to look at it in 3 steps: Determining which tax residency status you belong to, determine the chargeable income for the tax year and then applying the progressive tax rate against the chargeable income.

1. Status of Tax Residency
Divided into into 2 categories.
a) As a Singapore tax resident

Singaporean

Singapore Permanent Resident and have established your permanent home in Singapore

A foreigner who has stayed or worked in Singapore for 183 days or more in the tax year

b) As a Singapore non tax resident

A foreigner who stayed or worked in Singapore for less than 183 days in the tax year.